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Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $182,066 in overhead. The
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $182,066 in overhead.
The company has identified the following information about its overhead activity cost pools and the two product lines:
Activity Cost Pools | Cost Driver | Cost Assigned to Pool | Quantity/Amount Consumed by Basic | Quantity/Amount Consumed by Luxury | |||
Materials handling | Number of moves | $ | 2,666 | 19 moves | 43 moves | ||
Quality control | Number of inspections | $ | 27,900 | 200 inspections | 100 inspections | ||
Machine maintenance | Number of machine hours | $ | 151,500 | 6,000 machine hours | 4,100 machine hours | ||
5. Compare the results for a traditional system with that of an ABC system. Which do you think is more accurate? multiple choice
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Traditional System
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ABC System
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